Medicare and Social Security Fair Share Act

Summary

Imposes new taxes on high earners by changing how Social Security wages are treated, adding higher Medicare payroll and self‑employment taxes on incomes above set thresholds, and increasing the net investment income tax for very high‑income taxpayers. Payroll withholding and successor‑employer rules are adjusted so employers withhold limited new amounts while employees remain liable for unpaid portions. Applies to wages, net earnings, and taxable years beginning on or after January 1 of the first calendar year after enactment. The changes target high‑income wage earners, self‑employed taxpayers, and very high‑income investment income, and include procedural and cross‑reference edits across the Internal Revenue Code to implement these taxes and phase‑in provisions for the investment income increase.

• Applies Social Security taxes to wages between the Social Security wage base (when under $400,000) and $400,000.
• Adds a 1.2% additional Medicare payroll tax on wages above set thresholds and limits employer withholding to wages over $400,000.
• Imposes a new 1.2% additional Medicare self‑employment tax on high self‑employment income with coordinated thresholds.
• Raises the net investment income tax base and adds a phased‑in increase and a 13.6% additional rate for very high‑income taxpayers.
• Employers are shielded from collection for unpaid employee liabilities after employees pay, but remain subject to withholding penalties.
• Multiple technical and cross‑reference edits to the Internal Revenue Code are required for implementation.
• Effective for wages, net earnings, and taxable years beginning on or after January 1 of the first calendar year after enactment.
• Targets very high earners in wages, self‑employment income, and investment income; middle‑ and lower‑income taxpayers are largely unaffected by thresholds.